QUB-AZJ merger speculation

All may come to nought but Bridget Carter (Data Room, 'The Australian' online and to be in the paper tomorrow, Friday 20 August 2021) has put her name to this, of which this extract is part:

"Could a $13 billion-plus tie-up between logistics companies Qube and Aurizon be the next major mega merger on the agenda?

Woodside’s $38.5bn merger deal with BHP’s petroleum unit and the $22bn proposed deal to bring together oil and gas companies Santos and Oil Search have many in the market turning their mind to what other industry consolidation makes sense.

Qube reports its results next Thursday, and a line of questioning is expected to be what it will do with the cash it received from asset sales.

Qube sold a stake in its warehouse and property unit at Sydney’s Moorebank this year to Logos for $1.65bn, which was above its $1bn book value.

Also taking into account the proceeds it received from the sale of properties in Sydney’s Minto, Qube has $800m of cash currently sitting on its balance sheet and is debt-free.

The situation is a talking point among analysts in the sector, with possible outcomes for the extra cash being a capital return to shareholders or corporate activity.

Merging with Aurizon is seen by some to make sense, creating a transportation giant.

Both parties are eager to increase their scale and have balance sheets that can accommodate deal activity.

Yet some say that the deal could be more appealing for Aurizon than Qube, which may not want the coal exposure, and may need some convincing to take on business with an aspect unappealing to institutional investors.

Should Qube be open to the idea, the expectation is that it would lead any transaction, given it trades at a higher earnings multiple, allowing for more growth..."